California’s long-term care legislation has shifted significantly between 2022 and 2026, with the single biggest change for families being the reinstatement of a $130,000 Medi-Cal asset limit on January 1, 2026, after a brief period when assets didn’t count at all. Alongside that reversal, the state has raised the minimum wage for health care workers, moved institutional long-term care into managed care plans, forced nursing facility owners to disclose their finances, and tightened rules on staffing, dementia training, and abuse reporting. Each of these changes affects who qualifies for coverage, what care looks like day to day, and what a family can find out about a facility before choosing it.
Medi-Cal Eligibility in 2026
Medi-Cal is California’s Medicaid program and the primary payer for long-term care once residents can no longer cover the cost themselves. Before 2022, anyone with more than $2,000 in countable assets was ineligible for Medi-Cal programs serving older adults and people with disabilities. Assembly Bill 133 raised that limit to $130,000 in 2022 and then eliminated asset testing entirely for most Medi-Cal programs on January 1, 2024.1California Legislative Information. California Senate Bill 1354 – Long-Term Health Care Facilities: Payment Source and Resident Census For roughly two years, older Californians could qualify based on income alone, without draining savings or selling property.
That window closed. Citing budget pressures, the Legislature passed trailer bill AB 116 in June 2025, reinstating a Medi-Cal asset limit of $130,000 for a single applicant plus $65,000 for each additional household member, effective January 1, 2026.2Department of Health Care Services. Medi-Cal Changes 2026-2028 Anyone applying for or renewing Medi-Cal in 2026 will have their assets reviewed. The threshold is far higher than the old $2,000 rule, but families with substantial savings can still be disqualified, and the timing of any spend-down or restructuring matters.
The 30-Month Look-Back Still Applies
A common misconception is that California eliminated the look-back period when it eliminated the asset limit. It did not. When you apply for Medi-Cal long-term care services, the state can examine whether you transferred assets for less than fair market value during the prior 30 months. If you gave away money or property to get under the limit, Medi-Cal can impose a penalty period during which it won’t pay for your care. California’s 30-month window is shorter than the 60-month look-back most states use, but it still catches transfers made within roughly two and a half years of an application. With the $130,000 limit back in force, this rule has real consequences for anyone thinking about gifting assets to family before applying.
Why Medicare Won’t Fill the Gap
Many families assume Medicare covers long-term care. It largely does not. Medicare Part A pays for a skilled nursing facility stay only after a qualifying inpatient hospital stay of at least three consecutive days, and only when you need skilled care such as physical therapy or wound management tied to that hospitalization.3Medicare.gov. Skilled Nursing Facility Care Coverage caps at 100 days per benefit period, with a daily copay starting on day 21. Custodial care, the help with bathing, dressing, and eating that most people eventually need, is not covered at all. That gap is why Medi-Cal and private long-term care insurance exist, and it’s the context for every other change described here.
CalAIM and the Move to Managed Care
The most structural change to how long-term care is delivered in California runs through the California Advancing and Innovating Medi-Cal initiative, known as CalAIM. Under this framework, institutional long-term care benefits moved from fee-for-service billing into Medi-Cal managed care plans statewide. Managed care plans became responsible for skilled nursing facility benefits on January 1, 2023, and for intermediate care facility benefits on January 1, 2024.4Department of Health Care Services. CalAIM Long-Term Care Carve-In Member Information
For residents, long-term care, physical health, and behavioral health now run through a single managed care entity rather than being billed separately. In practice, this means families arrange nursing facility placement through their managed care plan, which can add bureaucracy but also opens the door to alternatives to institutional care. CalAIM introduced two benefit categories built around that goal. Enhanced Care Management provides intensive care coordination for people with complex needs. Community Supports address non-medical needs that affect health outcomes, including help with housing transitions, medically tailored meals, and personal care services.5CalAIM DHCS. Community Supports By the second quarter of 2024, more than 124,000 Medi-Cal members had received at least one Community Supports service, and more than 2,300 providers were participating statewide.
Higher Wages for Health Care Workers
Senate Bill 525 created a separate minimum wage schedule for health care workers, with the goal of reaching $25 per hour across the industry.6LegiScan. California Senate Bill 525 – Minimum Wages: Health Care Workers After amendments through SB 828 and SB 159 added a trigger tied to hospital quality assurance fees, the initial increases took effect on October 16, 2024.7Department of Industrial Relations. Health Care Worker Minimum Wage Frequently Asked Questions
The phase-in depends on the size and type of employer. Large health systems with 10,000 or more full-time equivalent employees reach the $25 floor by June 2026. Most other covered employers and certain clinics step up in increments through 2028. Rural facilities, small county hospitals, and high-Medi-Cal-payor facilities have the longest runway, with the $25 minimum not required until June 2033. The increases apply to certified nursing assistants, home care aides, and other support staff in covered settings. Facilities face substantially higher labor costs, and whether that yields better retention or higher out-of-pocket costs for residents will play out over the next several years.
Staffing and Dementia Training Standards
California law requires skilled nursing facilities to provide at least 3.5 hours of direct care per resident per day, with a minimum of 2.4 of those hours coming from certified nursing assistants.8Cornell Law Institute. Cal. Code Regs. Tit. 22, Section 72329.2 – Nursing Service – Staff The thresholds sit in Health and Safety Code Section 1276.65 and 22 CCR Section 72329.2, and facilities that fall below them face state enforcement. For anyone evaluating a facility, asking for its average staffing hours per patient day is one of the more concrete quality indicators available.
Because a large share of long-term care residents have cognitive impairment, California mandates dementia-specific training in both skilled nursing facilities and residential care facilities for the elderly. In skilled nursing facilities, every certified nursing assistant must complete at least two hours of dementia-specific training within the first 40 hours of employment, followed by at least five hours of dementia-focused in-service training each year.9California Legislative Information. California Code Health and Safety Code HSC 1263
Residential care facilities for the elderly have more extensive requirements under Health and Safety Code Section 1569.625. Direct care staff must complete 12 hours of dementia care training, with at least six hours during initial orientation before working independently with residents and the remaining six within the first four weeks of employment. Annual continuing education must include eight hours of dementia-specific training.10California Legislative Information. California Health and Safety Code 1569.625 These numbers set a floor. Families choosing a memory care setting should ask what the training actually covers and whether staff are current.
Facility Transparency and Consumer Protections
Financial Disclosure Under SB 650
Senate Bill 650 requires the corporate entities behind skilled nursing facilities to open their books. Starting with fiscal years ending December 31, 2023, any organization operating a skilled nursing facility must file an annual consolidated financial report with the state. The report must include financial data from all related entities in which the organization holds an ownership or control interest of five percent or more and that provide services or supplies to the facility.11California Legislative Information. California Senate Bill 650 – Skilled Nursing Facilities The law also requires a visual diagram of the corporate ownership structure. Families and regulators can now trace where Medi-Cal dollars actually flow, particularly in chain-owned or private-equity-backed facilities where related-party transactions have historically been opaque.
Census, Staffing, and Payment-Source Protections Under SB 1354
Senate Bill 1354 adds two layers of accountability for skilled nursing facilities that participate in Medi-Cal. First, these facilities must make their current daily resident census and nurse staffing data publicly available, either on their website or by providing the information to anyone who requests it by phone or email.12California Legislative Information. Senate Bill 1354 – Long-Term Health Care Facilities: Payment Source and Resident Census Second, the law reinforces the prohibition on discriminating against residents based on their payment source. A facility cannot treat Medi-Cal residents differently from private-pay residents in admissions, room assignments, or meal provision, and it cannot evict or transfer a resident who switches from private pay to Medi-Cal.13LegiScan. Bill Text: CA SB1354 – 2023-2024 Regular Session – Amended
Reporting Resident-on-Resident Incidents Under AB 1417
Assembly Bill 1417, effective January 1, 2024, clarified how facilities must report abuse when both the person harmed and the person who caused the harm are residents, and the latter has a dementia diagnosis. When these incidents don’t involve serious bodily injury, the facility must submit a written report within 24 hours to both the long-term care ombudsman and local law enforcement.14California Legislative Information. California Bill – AB-1417 Elder and Dependent Adult Abuse: Mandated Reporting Before AB 1417, the reporting pathway for these situations was ambiguous, which sometimes led to incidents going unreported or reaching the wrong agency. Failure to comply with mandated reporting requirements for elder abuse is a misdemeanor, with heavier penalties when the failure results in death or great bodily injury.
A Proposed Public Long-Term Care Insurance Program
California is studying whether to create a statewide public insurance program specifically for long-term care. Assembly Bill 567 established the Long Term Care Insurance Task Force within the Department of Insurance to explore the feasibility of a mandatory program that would give residents a benefit separate from Medi-Cal.15California Department of Insurance. Long Term Care Insurance Task Force
The task force released its actuarial report in December 2023, outlining five possible program designs funded through a payroll tax. Proposed tax rates range from 0.60% of pay for a basic supportive-benefit plan to 3.00% for a comprehensive higher-range plan, with corresponding benefit payouts of $36,000 to $144,000 over two years.16California Department of Insurance. California Assembly Bill 567 Oliver Wyman Actuarial Report A private room in a California skilled nursing facility can easily exceed $100,000 per year, so even the highest proposed benefit would cover roughly one to two years of institutional care. No program has been enacted, but the framework is in place for legislation that could eventually reach every California worker’s paycheck.
Tax Deductions for Long-Term Care Insurance Premiums
If you buy a tax-qualified long-term care insurance policy, part of the premium may be deductible as a medical expense on your federal return. The deductible amount depends on your age as of December 31 of the tax year. For 2026, the limits are $500 at age 40 or younger, $930 at ages 41 to 50, $1,860 at ages 51 to 60, $4,960 at ages 61 to 70, and $6,200 at age 71 and older.
These amounts count toward the 7.5% of adjusted gross income threshold that applies to all medical expense deductions, so only the portion of your total medical costs above that threshold is deductible. The benefit is most meaningful for people with substantial medical spending or high premiums in the older age brackets. On the benefits side, if your policy pays out on a per-diem basis rather than reimbursing actual expenses, the payments are excluded from gross income up to $430 per day in 2026. Amounts exceeding that daily cap or exceeding your actual long-term care costs are taxable.17Internal Revenue Service. Eligible Long-Term Care Premium Limits